Killed by bad policy

A thousand Lalit Mehtas will risk their lives fighting corruption. And how entirely avoidable this could have been.

There is an outcry over the murder of Lalit Mehta, an upright public-minded citizen, who was allegedly killed while attempting to expose the corruption in the National Rural Employment Guarantee Scheme (NREGS) in Palamau, Jharkhand. The public attention should help focus attention on the crime and bring the guilty to justice.

The murder provides a convenient excuse for proponents of the dubious scheme to reiterate their argument that the NREGS is being undermined by corruption. Prime Minister Manmohan Singh and Jean Drèze, the scheme’s chief proponent, have already done it. It is easy for Dr Drèze to blame the intermediaries and district officials for Mr Mehta’s brutal killing. But those who designed the system—and that includes Dr Drèze—can’t escape their share of the blame.

Any fool can design a scheme that would work if only there were no dishonest people in the world. As The Acorn has argued, the way the NREGS is designed creates huge new incentives for corruption. The proponents claim that the controls they had put in to check corruption would somehow work better than the controls that had been put in place to check corruption in the past. It should be clear to everyone by now that those controls don’t work. They only put good people like Mr Mehta in harm’s way.

Let’s remember now that among the UPA government’s acts of monumental irresponsibility ranks the extension of the NREGS to all districts in India, despite knowing that it is not quite working as touted. There are hundreds of Palamaus out there and thousands of Mr Mehtas will face threats to life and limb. These would have been avoidable with some clear thinking, competent policy design and responsible leadership.

In fact bad policy design only compounds a more fundamental flaw: bad policy vision. As Rohit Pradhan notes, the NREGS is designed to keep people in villages. And as Atanu Dey writes, it is also a scheme that is designed to keep them poor.

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9 Responses to Killed by bad policy

  1. anonymous coward 14th June 2008 at 17:48 #

    Hey Nitin,

    There seems to be typo in this sentence:
    Any fool can design a scheme that would work if only there were dishonest people in the world.

    Shouldn’t it read as ‘honest people’ ? If not, could you enlighten me about what you meant by that :).

  2. Nitin 14th June 2008 at 18:20 #

    Anonymous Coward,

    Huh? What are you referring to?

    [I just fixed the typo! ;-) The analysis of the statement (before correction) would have been an interesting exercise in itself!]

  3. Chandra 14th June 2008 at 23:42 #

    While I’m not sure why living in a village, with no job, is such as bad thing compared to living in a slum in a city, with no job, or how a 100 hours/year at minimum wages can induce permanent dependency, I even more confused as to why a policy killed anyone. If so, shouldn’t more people be dead by now instead of just two based on the money involved.

    It’s surely silly to say there is a fundamental right to work that the state should provide (what’s next fundamental right to low inflation!). But the opposition to the scheme, beyond corruption, seems to be more so. Obviously there are plenty of better ways to generate jobs, especially low and semi-skilled jobs. But socialist Congress I is not interested in doing what is necessary – for the past 60 years. Even if this scheme provides help to 70-80% of the intended people, it seems it’s worthwhile. It’s another matter if the country afford it.

  4. Amole 15th June 2008 at 06:01 #

    @Chandra,

    I found this after following one of the links in this post on the last line.

    Deeshaa.com:

    The basic objection I have to the scheme is that is in effect it is a purely income redistribute scheme. A purely redistributive scheme is not objectionable in and of itself provided there is sufficient production but the production suffers from mal-distribution. However, the basic fact is that the production itself is insufficient. So in this case the all effort should be made to increase production and simultaneously seek a more equitable distribution.

    The money spent on the NREGS has an opportunity cost. What is lost is the government’s ability to fund production enhancing projects. Suppose the money was spent for a massive drive to provide primary education and health services to rural areas coupled with a reduced family size drive. Or it was used to improve the infrastructure of the country such as building a modern rail transportation system. Any of a large number of public works projects would generate large employment opportunities and lead to capacity building and thus to an increase in the total national income. In this case, it would not be just an “employment generation” but “income generation”.

    The problem is that the focus of the proposal is flawed. It focuses on employment instead of focusing on increasing incomes. The distinction is important. Income, to an individual, is a share of the total production that the economy produces. By focusing on the employment and not on the production, the scheme merely redistributes the proceeds of a limited production.

  5. Chandra 15th June 2008 at 11:58 #

    Amole, I read Atanu’s post before I commented. While Atanu is right, for whatever reason Congress I doesn’t want to focus on employment generation (and there is real no opportunity cost – because presumably all productive spending by the government, such as building highways, has come to a standstill in the past four years, although government borrowing does crowd out private borrowing – but our corporate bond market is minuscule). Meanwhile there are people suffering. There is something to providing help to the poorest of the poor however modestly, however partially, and however corruptly, for the little work they do.

  6. Nitin 15th June 2008 at 17:26 #

    Chandra,

    While I’m not sure why living in a village, with no job, is such as bad thing compared to living in a slum in a city, with no job

    There is a difference…mainly in terms of opportunities for income generation. Cities provide greater opportunities than villages. That’s why you see people moving in to live in cities, even if it means living in slums, the world over. The NREGS is justified on the basis of the fact that there are few employment opportunities in the villages.

    This being so, the onus is on those who put in place schemes like NREGS to justify why people ought to stay in villages and dig holes and fill them up to earn subsistence wages. Salil Tripathi’s article in Pragati puts the whole thing in perspective.

    Finally, I think our assessment of development goals must not be restricted by what Congress Party’s politics and ideology allow. That’s like being grateful to your captor for feeding you. I’d rather the chains come off.

  7. Rohit 15th June 2008 at 19:43 #

    Chandra,

    The fundamental question we must seek to answer is this: Can India’a villages sustain 70% of the population? NREGS may be defended as a short measure while the government seeks to improve our cities and/or as Atanu has suggested, encourages the creation of new ones. However, the primary motive of those behind NREGA, Aruna Ray for example, is an utopian belief that the old way of life can be sustained if only opportunities are artificially created by the government utilizing tax payer’s money. Note, if all the projects NREGA were independently justified, there would have been no need for the scheme in the first place! NREGS in its current form resembles old age pension schemes prevalent in many states like Haryana: an individual gets hardly 200rs a month which makes little difference to his standard of living while placing a huge burden on the state finances preventing it from investing in actual reforms–better roads for example.

    The rural crisis is distressing indeed. As I said, there may well be justification for short term ameliorative measures. But it must be backed by a larger vision that transfer of population to cities is inevitable. Even in that case, a direct cash transfer to poor would make far more sense.

  8. Chandra 16th June 2008 at 12:59 #

    Nitin/Rohit, I am not sure where NREGA is stopping anyone from doing anything. If someone wants to migrate to the city, no city in the country surely has the same license/permit requirement like the Chinese communists have. Also because the payment via NREGA is meager and for only 100 hours, a person can easily make the income/economic choice – stay or move.

    While Salil Tripathi talks about this subgroup, he is mainly was interested in a different issue. And regarding the freedoms he wants, this subgroup already has it – I know, for example, small farmers in Punjab provide Pepsi with tomatoes, collectively. But unfortunately there are not too many Pepsis around – Reliance Food retail division is taking steps in that direction, but it takes decades to have a large impact from many players. The freedom that Sri Tripathi is talking about exists now. NREGA is to help people in distress who wants to stay, not stop anyone from moving. And surely not every illiterate/semi-literate small-farmer is capable of moving to a slum in the city, letting go of everything he/she has ever known.

    From what I can read there seems to be a notion that villages are bad and cities, even the slums, are better. It’s a strange notion for me because I love most villages that I stayed in my life. I would rather have lot of villages with all the modern technology, as it slowly is seeping in now, then have mega cities. But with higher GDP, urbanization, planned or unplanned, is inevitable.

    It’s all well and nice to think of technology and investment in farming and irrigation, and assessing development – and surely has to be done. But nothing happens for years or decades, except in a few states with capable leaders, like say Gujarat, for example; meanwhile poor suffering families need help. I am sure it’s simple to just give away cash (I think that was in reference to subsidies – the number, I think, was Rs 30,000) but why not de-silt that river or pave a village road while giving away that cash? Unfortunately not every project that needs to get done has a budget.

    Finally, I just think the focus of the various criticisms of NREGA are a bit off-base. Corruption surely is an issue. (As everyone knows, if corruption is an end all, our country will come stand still.) But beyond that I see little downside. Who knows, may be some families receiving a little additional income may spend the money wisely and actually send their children to school instead of sending them off to work. Especially when nothing is being done to create the lakhs of jobs needed to absorb the vast number of unskilled unemployed, urban or villagers.

  9. Chandra 16th June 2008 at 13:00 #

    Oops…I didn’t realize my comment was so long!

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